Capitol Notebook

Corporate Attorneys General

Texas Attorney General John Cornyn is one of a handful of conservative state legal officials who have banded together to raise money to elect more attorneys general who-like themselves-are reluctant to sue big business. In a fundraising letter he wrote last year, Cornyn explained that the controversial group known as RAGA (Republican Attorneys General Association) was born out of “concerns arising out of the industry-wide lawsuits that seek to promote public policy changes via the courthouse rather than the statehouse,” and out of a desire to stop those with “a wish list for future mass state lawsuits-car rental companies, pharmaceutical firms, makers of lead paint and gun manufacturers.”

RAGA receives support from industries that fear state lawsuits, much of that money laundered through a larger Republican PAC to conceal the identities of its donors.

So it’s no surprise that Texas has yet to follow Rhode Island’s lead in suing lead paint manufacturers. Last month, a state judge ruled that Rhode Island Attorney General Sheldon Whitehouse could go to trial with his lawsuit against eight makers of lead paint. The lawsuit, which alleges that the defendants knowingly sold a product that poisons children’s brains, seeks to recover the state’s costs to remove lead paint from buildings where kids can be exposed to it.

While numerous local governments have filed such lawsuits, Rhode Island is the first state to do so. Whitehouse’s office says that it has been contacted by 15 other states that are exploring similar suits. Citing standard protocol, Whitehouse’s office would not identify which attorneys general have called.

According to the Centers for Disease Control, lead is the nation’s leading environmental health threat to kids. The lead industry’s potential liability is far greater in Texas than in Rhode Island. An Environmental Defense report ranks Texas No. 7 nationally in the number of housing units with elevated lead risks (180,000 units), eight times more than No. 37-ranked Rhode Island.

Given RAGA’s condemnation of industry-wide lawsuits, it seems unlikely that RAGA members will file suit. This is particularly true of Bill Pryor, the Alabama Attorney General, who currently heads RAGA, and Texas’ Cornyn. Both of these attorneys general specifically have cited lead-paint lawsuits as being an example of the kind of litigation that prompted them to found RAGA in the first place.

Cornyn’s position is even more worth watching because a leading defendant in Rhode Island’s lawsuit is NL Industries, which is controlled by Dallas corporate raider Harold Simmons. Simmons is a major donor to Republican PACs and candidates. He gave $90,000 to George W. Bush’s two gubernatorial campaigns and has given Cornyn $31,000 since 1998.

As the producer of the lead pigment that was added to many brands of paint, NL Industries has lobbied to limit its potential liabilities. Prior to joining Bush’s cabinet, Interior Secretary Gale Norton lobbied state and federal officials on lead paint issues for Simmons’ NL. In fact, visitors’ logs reveal that Norton lobbied Cornyn’s office on this issue on May 19, 1999. In another high-powered connection, a leading industry defense attorney in the Rhode Island lawsuit is Richard Thornburgh, who was United States Attorney General under the former President Bush.

Since RAGA’s creation in 1999, Simmons’ two main holding companies, Contran and Valhi, have contributed $350,000 to the Republican PAC that launders RAGA’s money, the Republican National State Elections Committee. RNSEC received another $211,000 since RAGA’s creation, from other companies that are defendants in the Rhode Island suit. This includes $201,000 from ARCO (and ARCO chairman emeritus Lodwrick Cook) and $10,000 from DuPont.

“This is absolutely an effort by people with special interests to stop attorneys general from pursuing their traditional role as protectors of the public interest,” said Scott Harshbarger, the former Democratic attorney general of Massachusetts who now heads Common Cause. Democrats are not alone in their criticism of RAGA. “I try to keep politics out of my business as attorney general,” Pennsylvania’s Republican Attorney General Mike Fisher told the Washington Post when asked why he did not join RAGA. “We’re a family, and families can disagree,” Grant Woods, a former Republican attorney general of Arizona told the National Association of Attorneys General convention last year. “But don’t do this.” (According to Tim Barnes, RAGA’s Executive Director in Washington, D.C., RAGA “is not a membership organization,” but includes all Republican Attorneys General. In addition to Pryor, current officers are Mark Early of Virginia, Wayne Stenehjem of North Dakota, and Cornyn.)

One factor that may have spurred the formation of this partisan group in 1999 was the fact that the non-partisan National Association of Attorneys General was then headed by Democratic Mississippi Attorney General Mike Moore. Moore launched the once-quixotic state tobacco litigation that is now paying states around the nation $246 billion.

RAGA’s first chairman, South Carolina Attorney General Charlie Condon, was an early critic of the tobacco litigation, but later hopped on that gravy train. Condon also dropped South Carolina’s Microsoft anti-trust case-just months after Microsoft gave $20,000 to that state’s Republican PAC. That donation was one of the largest that Condon’s state party had ever received. Microsoft also gave Condon’s campaign $3,500 after he dropped the Microsoft suit.

Nebraska Attorney General Don Stenberg is another latecomer to the tobacco lawsuit who has experience with money scandals. Before he joined RAGA, Stenberg received $15,000 from Nebraska’s Vopnford family-including $1,000 from 12-year-old Leif Vopnford. Not surprisingly, Stenberg was not among five state attorneys general who sued the Vopnford’s company, Thousand Adventures, in the mid 1990s. After Thousand Adventures took $420 million from people who bought into a time-share camping scheme, the company closed two-thirds of its 58-campground empire and let others go to seed.

RAGA’s funding base prompts much of the group’s controversy. Tobacco lobbyist Ed Rogers of Barbour Griffith & Rogers attended RAGA’s kick-off fundraiser in Washington, D.C. in 1999. Also present was National Rifle Association spokesperson Bill Powers, whose industry faces an anti-trust investigation launched last year by six state attorneys general. The NRA also volunteered to host a skeet shoot for participants in the RAGA conference that Cornyn hosted last year in Austin.

Microsoft, which is defending itself from anti-trust charges filed by the attorneys general of the United States and 23 states, also sent representatives to the Austin RAGA conference. It has acknowledged contributing at least $10,000 to RAGA’s war chest.

Austin RAGA conference participants who contributed at least $5,000 were originally scheduled to attend an opening reception at then-Governor George W. Bush’s state Governor’s mansion. But this event was cancelled the day that reporters questioned Bush’s office about RAGA’s stealth fundraising tactics.

It is impossible to know the full extent of the support that RAGA receives from industries that face state lawsuits because RAGA does not disclose its donors. Instead, it directs individuals, PACs, and corporations to contribute to the Republican National State Elections Committee.

RNSEC does report its expenditures and contributions, but neither RNSEC nor RAGA will reveal which of the $162 million in contributions that RNSEC received in the 2000 election cycle belong to RAGA. Significantly, Philip Morris and the National Rifle Association are two of RNSEC’s top donors. Georgetown University election law specialist Roy Schotland has said that RAGA’s fundraising scheme warrants “even talking about money laundering.”

Well over a year after he mailed his RAGA fundraising solicitation, Cornyn was asked why the RAGA donors that he solicited have not been disclosed. “The organization that you are referring to solicits money, and I’m really not sure who that is that’s solicited,” he said at Texas Federalist Society lecture at the UT law school last month. When reminded that he himself had done the soliciting, Cornyn replied, “It was a very broad-reaching letter. The fact is that the receipt of those funds is duly recorded in compliance with all applicable laws and so I don’t understand your point about nondisclosure.” Cornyn also defended the practice by saying, “No one can point to a single example in which that [RAGA fundraising] has compromised my professional judgment.”

In fact, questions have been raised about Cornyn’s RAGA fundraising and his professional judgment. In April 2000 Cornyn settled a lawsuit that his predecessor filed against Aetna US Healthcare for offering doctors incentives to withhold medically necessary care. Cornyn allowed Aetna to settle the suit the way it likes to settle medical claims-without paying a dime. Muddying these waters was the fact that, in the year prior to the Cornyn’s settlement, Aetna contributed $75,000 to the PAC that launders RAGA’s money. None of the parties involved would disclose if Aetna had earmarked these funds for RAGA.

Last month a Cornyn spokesperson told the Dallas Morning News that his office is monitoring the Rhode Island litigation and will decide in the future whether or not to follow suit. Noting that he had not discussed the case with Cornyn, Harold Simmons said, “I would certainly hope he wouldn’t join the suit because it is a bad case.”

Andrew Wheat works for Austin-based Texans for Public Justice, a non-partisan, non-profit organization that follows money in Texas politics (www.tpj.org).